Salary Accounts With Employer’s Official Bank Not Mandatory: Kerala HC [Read Judgment]

The Kerala High Court, in the case of TM Dinesh Kumar & Ors vs Malabar Cancer Centre & Ors, held that all employees need not have salary accounts with the official bank of the employer and that the official bank can transfer the salaries of the employees to the existing accounts of employees in other banks.

Justice PV Asha further noted that the employees cannot be compelled to open zero balance or salary accounts with the official bank if they do not otherwise have any transactions with that bank.

In this case, the employees of the Malabar Cancer Centre (MCC) were requested to open savings account in IDBI for disbursement of salary.

They were informed that they request IDBI to transfer their salary to their existing accounts. The employees were not paid their salaries since they did not open new accounts with IDBI. The employees did not receive salary after August 2016 and also did not receive their Onam and other festival allowances.

The court noted that the dispute in question is trivial and should have been resolved between the employees and the employers outside the court itself.

It further noted that denial of salary on the ground that the employees did not open accounts with IDBI is illegal. It directed MCC to immediately provide details of the employees’ existing accounts to IDBI in order to ensure a speedy disbursement of salary, allowances and other monetary benefits.

Read the Judgment here.